NEW YORK (CNNfn) – Chubb Corp. said Monday it has signed a definitive agreement to sell its Chubb Life Insurance Co. of America unit to Jefferson-Pilot Corp. for $875 million in cash.
Chubb is also reportedly negotiating to sell off 80 percent of its real estate business, Bellemead Development Corp. for about $1 billion to Patriot American Corp. of Dallas and Beacon Properties Corp. of Boston.
Chubb is taking the steps to concentrate on its central property and casualty insurance business. The company had made it known last year that it would sell the two units in response to investors’ concerns over weak earnings.
Chubb’s life insurance division ranks 67th while the property and casualty division is the 12th largest. Investors were pressing for the company to simplify its profile in the insurance arena.
Chubb Chairman and Chief Executive Officer Dean O’Hare said the company intends to use a substantial portion of the proceeds from the sale of the life insurance unit of the sale to buy back stock.
Chubb is mostly known for selling homeowners’ policies to affluent Americans and specialized liability coverages for businesses.
The deal marks Greensboro, N.C.-based Jefferson Pilot’s third major acquisition since 1995. It has already bought Alexander Hamilton Life Insurance Co. of America for $600 million and the Kentucky Central Life Insurance Co. for $100 million.